A.M. Best Affirms Ratings of Unum Group and Its Core U.S. Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of
A (Excellent) and issuer credit ratings (ICR) of "a" of the core U.S.
life/health insurance subsidiaries of Unum Group (Unum)
(headquartered in Chattanooga, TN) [NYSE: UNM]. Concurrently, A.M. Best
has affirmed the ICR of "bbb" of Unum as well as all existing debt
securities issued by the organization. The outlook for all ratings is
stable. (See below for a complete listing of the companies and ratings.)

The rating affirmations reflect Unum's strong franchise, solid
capitalization, diversified earnings sources and favorable operating
performance. In a challenging economic environment for employee benefits
companies, Unum has reported premium growth across most of its core
markets, driven by the Unum U.S. segment. The organization continues to
generate consistent earnings with an emphasis on underwriting discipline
and expense management, and its returns have historically exceeded
industry medians.

Unum is well recognized in the United States as having a leading
position in the group disability market, supplemented by its top-three
rankings in group life and voluntary benefits. Over the last several
quarters, Unum U.S.' core group disability segment reported loss ratios
in the 84%-85% range, evidencing a lack of volatility that some of its
competitors have recently experienced. However, Unum U.K. and Colonial
Lifehave recently reported less favorable sales trends as well
as volatility in key metrics for certain product lines. For example,
Unum U.K.'s life business recently experienced a noteworthy increase in
average claims size, leading to deteriorating profitability for this
line of business. A.M. Best notes that persistency within all of Unum's
segments continues to be generally favorable, reflecting the group's
ability to retain quality business.

Over the past several years, Unum has maintained its consolidated
risk-adjusted capitalization primarily through healthy operating
results. While the capital cushion at some of its subsidiaries
fluctuates periodically as it is deployed through share repurchase or
other means, A.M. Best believes the group's prospective risk-adjusted
capital position will remain appropriate for its ratings. Moreover, with
total debt-to-capital at roughly 25%, strong interest coverage and just
under $800 million of holding company cash and marketable securities,
Unum has excellent financial flexibility. Additionally, the organization
has approximately $7 billion of net unrealized capital gains in its bond
portfolio, with modest exposure to structured securities and real
estate-related investments.

With respect to sales growth, A.M. Best expects Unum to continue to face
the headwinds of a sluggish U.S. economy and elevated unemployment.
Also, the extended period of low interest rates may pressure operating
earnings through lower new money yields and inforce product pricing
assumptions.

A.M. Best believes that Unum's ratings are well positioned at their
current levels in the near to medium term. Factors that could lead to
negative rating actions include sizable statutory reserve charges,
sustained periods of higher than expected claims incidence, duration or
severity; or a considerable decline in operating performance or
risk-adjusted capitalization relative to A.M. Best's expectations.

The FSR of A (Excellent) and ICRs of "a" have been affirmed for the
following core U.S. subsidiaries of Unum Group:

Unum Life Insurance Company of America

Provident Life and Accident Insurance Company

The Paul Revere Life Insurance Company

Colonial Life & Accident Insurance Company

First Unum Life Insurance Company

Provident Life and Casualty Insurance Company

The FSR of B++ (Good) and ICR of "bbb" have been affirmed for The
Paul Revere Variable Annuity Insurance Company, a non-core
subsidiary of Unum Group.

-- "bb+" on $300 million ($226.5 million outstanding) 7.405% capital
securities, due 2038

The following indicative debt ratings under shelf registration have been
affirmed:

Unum Group-

-- "bbb" on senior unsecured

-- "bbb-" on subordinated

-- "bb+" on preferred stock

UnumProvident Financing Trust II and III-

-- "bb+" on preferred securities

The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best's rating process and contains the different rating criteria
employed in the rating process. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.